Prefecture mulls introducing new “Lodging tax” in 2021

Okinawa Prefecture has restarted studying a new tax on tourism industry in fiscal 2021. Under consideration are three alternative taxes – “entry tax” for arriving tourists, “lodging tax” for users of lodging facilities, and “rent-a-car tax” for users of rental cars. The “lodging tax” option is regarded as the most viable prospect of the three.

Okinawa Prefecture has studied the above three taxes since 2010. However, the introduction was put off because of the rise in the consumption tax in 2014 and for other reasons.

However, the necessity of some kind of revenue increase has become obvious, since the rapid increase in the number of tourists, including those from foreign countries, mandates securing financial resources to prepare for multilingual environment and other services. The revenue from the new tax is planned to be used to improve systems for accepting tourists and to establish a contingency plan if the number of tourists drastically drops.

By referring to examples in Tokyo and Osaka, Okinawa Prefecture is planning to discuss how to collect the tax and how to use it based on the input from authorities concerned. The plan is to collect opinions with representatives of the tourism industry this fiscal year, and inaugurate an implementation working group as early as in fiscal 2018.

Informing Okinawa residents and tourists would begin in 2020, and introducing the new tax would take place in fiscal 2021.